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The Lead - The Questions to Ask Before Hiring a BDM

As a sales consultant in the property management industry, there is one question I'm asked more often than any other: "Should I hire a BDM?"

For those unfamiliar, BDM stands for Business Development Manager. The most common title for a sales person within the PM space. Personally, I can't stand that title. But I'll save that rant for another day.

This topic isn't something I've written much about. That's mostly because I think for the most part it's the wrong question to be asking. I tend to believe that PM business owners have a false belief that a BDM will come in and solve their growth problem. That will become obvious in what follows here.

But let's say you've found yourself asking this question. I don't want to discount the fact that some people have made it to this place. So I thought it would be helpful to present some basic and clear questions that you should be asking yourself, before making this move.

To be clear, there are a lot of questions I would ask. So these are intended to cover a lot of ground.

If you hired a salesperson today, would that person be in a position to be successful?

Broad question, purposefully. Here's what I mean. A good BDM is not necessarily a builder. A good BDM is good at converting prospects. There are people who love to build systems and structures, often times those people aren't in sales. In fact, I'd argue that if you happen to find someone with sales superpower, asking them to build is a colossal waste of resources.

Whether you think of it or not, a BDM is operating within a framework. Either you give them one, or the create their own. Sales process, qualifying criteria, ideal client profile, CRM, the KPIs we measure, etc. Who is best positioned to define those things? You as a business owner, or your brand new sales person? Hopefully that's an easy answer.

Sure, there could be some edge case exceptions of a BDM who successfully ran a playbook at another PM company. They'll probably bring some good ideas, and have an idea of what success looks like. That person also will be hard to find.

A good sales person needs some basic infrastructure to work with. Asking them to implement a CRM while also generating leads, closing deals, is a poor use of their time. Can they have input on critical aspects of your sales organization? Yes! And they should in all likelihood. But refining is different than building from scratch.

So to put it simply, your new BDM starts tomorrow. What are you handing them? Be honest with yourself.

What's my real constraint?

If I had to generalize, I think most business owners think about hiring a BDM because growth isn't happening the way that they want. But why, is an entirely different question.

If you aren't growing because you don't have enough leads, hiring a BDM is likely not the answer. Sure, you might be able to find a rockstar who can generate a lot of their own opportunities. But that's hard to find, and in all likelihood it will take a long time to get going. Closer and hunter are two different things.

Another common reason a business owner might ask this question, is they are too busy handling the day to day management and business development tends to play second fiddle. Certainly a reasonable thought process, but more questions need to be asked.

What in particular falls by the wayside? Are you too busy to enter call notes into the CRM, set tasks, follow up with prospects? Essentially this is disorganization that causes you to miss opportunities. If this is you, find a sales ops assistant who can help you stay on top of all this. It'll be way cheaper!

Another reasonable constraint may be that you just personally hate talking to strangers. Sales conversations might suck the life out of you. That's ok. Maybe you've gotten where you are by simply gritting your teeth and pushing through it. You know yourself and what gives you energy. I get it.

Final point - you might think you're not "good at sales". If you tell me that, I'll still ask you for proof. Track your own metrics, understand where the bottlenecks are, and allow data to inform your decision before you make an expensive move. Again, be honest with yourself.

Can I afford a BDM?

Most people go here first. I purposefully made it third. Just because you can afford to do something, doesn't mean you should.

Two real components to consider here individually, and together. First is base compensation. I am personally not a fan of the straight commission BDM. Could it work for a time? Sure. But people need to live. So if you aren't providing base comp they are either sweating out their daily existence working fully focused on growing your business, or they're doing something else that's keeping them fed. And guess what will get most of their attention?

The second component is incentives, ie. commission. Incentives drive outcomes. Sales people want to make more money. If they didn't, they'd gladly punch the clock and take a predictable income stream where they weren't ignored and rejected all day. We like the chase, the upside.

Considering these two things together gets you to OTE aka "On Target Earnings". If your BDM hit their goal, what's the total amount they stand to earn. My recommendation is that base compensation and commission are close to 50/50 of OTE, maybe slightly more tilted towards heavier base.

Here's where it gets difficult - take your growth goal for the year. If you know how many doors you think you canreasonablyexpect to grow and your revenue per unit, then you will have a rough idea of what that growth is worth to the business. Hopefully you also know how profitable you are and can take the assessment a step further.

There's probably a few more financial things to review (customer lifetime value for instance), but you get the picture. Basically I'm asking if you can get to a good compensation model that will be motivating and work in your market.

The thing I tend to see most business owners fail to realize, is that just because the compensation model is doable and reasonable for you as well as your industry, isn't enough. You aren't competing with the other PM companies in your market for a BDM. You are competing with the SaaS companies, all the other service industries etc. It doesn't matter where they come from, if you want top talent you have to pay for it.

A lot more to come on this topic. I'm actually getting ready to start recording a sales leadership series with some rockstar guests, and this is one of the topics.

Here's the point I'll reiterate - a BDM is not going to fix your growth problem in all likelihood. Many of the problems that exist today aren't solved by a full time dedicated sales person. That person will just inherit those problems, and it'll be a more expensive headache.

Are there reasons to hire a BDM? Are some business owners ready? Yes. I hope these questions are a helpful pulse check on the state of your business before you make that call.